Posted on Jan 4, 2017
Do you really lose money selling some of your leave before retirement?
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I keep reading that you lose money selling your leave. I plan on the future on doing both, taking as little leave as I need and selling the rest. I don't understand how you make more taking the leave.
If I sell the day's I get that money PLUS, not OR my base pay divided by 30 multiplied by the amount of days sold.
If I sell the day's I get that money PLUS, not OR my base pay divided by 30 multiplied by the amount of days sold.
Posted in these groups: 
Finance
Finance
Posted >1 y ago
Responses: 19
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When you sell your leave you do not receive the non taxed benefits like BAH, BAS; therefore, you get less. Selling leave means only getting base pay.
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SGM Erik Marquez
Selling leave is a loss for all the great reasons stated above. .. using the leave allows you some breathing room as you transition...better yet if you transition locally. I had 20 days PTDY, then 91 days of excess and accrued leave due to ..exceptions to policy, back to back deployments, the duty positions I was in the last three years....
I took 20 days PTDY, signed back in for a week to help the unit, 60 days of terminal leave and sold 31.
Taking more leave was not beneficial to me, the job plan was solidified, no kids at home to catch up with, wife was at work.
So selling leave was worth the "loss" to me.. but every persons situation is different.
Taking 2 weeks of each month the last few months, and then your PTDY, and finally a 30 terminal leave period might be a great way to help the unit with your replacement, but allow you non committed time to job search, do interviews, finish that fishing boat repaint... what ever.
I had so many days off the last year, my wife told me to go get a job i was driving her nuts....lol
I took 20 days PTDY, signed back in for a week to help the unit, 60 days of terminal leave and sold 31.
Taking more leave was not beneficial to me, the job plan was solidified, no kids at home to catch up with, wife was at work.
So selling leave was worth the "loss" to me.. but every persons situation is different.
Taking 2 weeks of each month the last few months, and then your PTDY, and finally a 30 terminal leave period might be a great way to help the unit with your replacement, but allow you non committed time to job search, do interviews, finish that fishing boat repaint... what ever.
I had so many days off the last year, my wife told me to go get a job i was driving her nuts....lol
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LTC John Shaw
COL Vincent Stoneking - the orders must be able to support the leave period, this is why most units orders are 400 days for mobilization to cover the leave period. If you have been mobilized twice in a 60 month period there is additional post deployment leave that doesn't seem to be impacted by the order length. We need an AG expert or HRC to weigh-in.
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1SG Bill Farmerie
I had almost 4 months of terminal leave when I retired (due to deployments). It was great to have a pay check while still searching for a job, and then once found receiving mil pay (with BAH and BAS, while working a civilian job.
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You actually make more money by selling the leave. The answer is a little nuanced, and you need to look at total cash flows. The confusion comes into play when trying to isolate one month's pay, or when trying to decide between the scenarios of taking it as regular leave, selling the leave, or taking it as terminal leave.
For the purpose of an illustration, let's make some simplifying assumptions here by focusing on your final year in uniform. During that final year, you would serve 12 months and you would earn 30 days of leave. Let's assume you already earn BAH and BAS, but we'll ignore any other things like hazardous duty pay, family separation pay, etc. Let's also ignore any other stockpiled leave.
If you burn up all of your earned leave as regular leave before retirement, you'll receive a total of 12 months of salary, 12 months of BAH and 12 months of BAS. This scenario is the status quo and presents no change to your regular cash flows.
If you serve the entire year and sell the 30 days of earned leave, you'll get 13 months of salary (the 12 you serve + the 1 you sell), 12 months of BAH and 12 months of BAS. So, you actually gain money by selling the leave (one extra month of salary).
If you choose to take the 30 days as terminal leave at the end of that final year, the mix changes. You'll receive a total of 12 months of salary, 12 months of BAH and 12 months of BAS. So, by taking the terminal leave you do get into your "retirement lifestyle" one month earlier, but at the cost of the extra salary.
So, is getting into your "retirement lifestyle" a month early worth giving up the extra month of salary? If so, go on terminal leave. If not, stay on the team and sell the leave.
If you're stepping into another job immediately upon retirement, the scenario changes yet again. You'll get more total cash flow (from both the military and your new employer) if you take terminal leave or you sell the leave. That was what happened in my case. I stepped into the new job while on terminal leave and I essentially had a double salary for 75 days. I would have had a similar scenario if I had sold my leave, but the timing was an issue for me. The general rubric (timing issues aside) is that if you make more in your retirement job, take terminal leave and get started earning the higher salary. If you make less in your retirement job, keep working at the higher salary, and then sell the leave.
For the purpose of an illustration, let's make some simplifying assumptions here by focusing on your final year in uniform. During that final year, you would serve 12 months and you would earn 30 days of leave. Let's assume you already earn BAH and BAS, but we'll ignore any other things like hazardous duty pay, family separation pay, etc. Let's also ignore any other stockpiled leave.
If you burn up all of your earned leave as regular leave before retirement, you'll receive a total of 12 months of salary, 12 months of BAH and 12 months of BAS. This scenario is the status quo and presents no change to your regular cash flows.
If you serve the entire year and sell the 30 days of earned leave, you'll get 13 months of salary (the 12 you serve + the 1 you sell), 12 months of BAH and 12 months of BAS. So, you actually gain money by selling the leave (one extra month of salary).
If you choose to take the 30 days as terminal leave at the end of that final year, the mix changes. You'll receive a total of 12 months of salary, 12 months of BAH and 12 months of BAS. So, by taking the terminal leave you do get into your "retirement lifestyle" one month earlier, but at the cost of the extra salary.
So, is getting into your "retirement lifestyle" a month early worth giving up the extra month of salary? If so, go on terminal leave. If not, stay on the team and sell the leave.
If you're stepping into another job immediately upon retirement, the scenario changes yet again. You'll get more total cash flow (from both the military and your new employer) if you take terminal leave or you sell the leave. That was what happened in my case. I stepped into the new job while on terminal leave and I essentially had a double salary for 75 days. I would have had a similar scenario if I had sold my leave, but the timing was an issue for me. The general rubric (timing issues aside) is that if you make more in your retirement job, take terminal leave and get started earning the higher salary. If you make less in your retirement job, keep working at the higher salary, and then sell the leave.
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SGM Erik Marquez
LTC Kevin B. Sir
If I'm choosing my retirement date.. say Dec 31 2016....and I sell 30 days leave on DEC 31 2016 I will have received a total of 13 months pay for that calender year. Got it, check and agree
However the 13th months pay would be base only..so LESS than normal.
If I choose to retire on Jan 31 2017, but go on term leave Dec 31 2017... I am free of military encumbrance DEC 2016, but still get paid at full rates for that last month Jan 2017.
Both instances have the SM released from duties and responsibility on the same day as far as direct requirements to the unit, both SM took off the uniform and hung it up on Dec 31 2016 and both are getting that 13 months worth of pay having only served actively 12 months that year. . but only the second situation is getting that "13th" pay day at the full rates applicable.
The down side to the second plan is, you officially can not take a DOD job while your on terminal leave and many other power employees may not hire you either as the Army "could" call you back in those 30 days. I have heard from many of my peers and seniors who walked on DOD or Fed or State jobs, ect that the headhunter was understanding and Held the job for them until they could officially l be put on the payroll.
Sir that above is where i get my position you "loose pay" by selling leave at a reduced rate.
Please review and poke holes in it... I don't want to be giving out flawed advice.
If I'm choosing my retirement date.. say Dec 31 2016....and I sell 30 days leave on DEC 31 2016 I will have received a total of 13 months pay for that calender year. Got it, check and agree
However the 13th months pay would be base only..so LESS than normal.
If I choose to retire on Jan 31 2017, but go on term leave Dec 31 2017... I am free of military encumbrance DEC 2016, but still get paid at full rates for that last month Jan 2017.
Both instances have the SM released from duties and responsibility on the same day as far as direct requirements to the unit, both SM took off the uniform and hung it up on Dec 31 2016 and both are getting that 13 months worth of pay having only served actively 12 months that year. . but only the second situation is getting that "13th" pay day at the full rates applicable.
The down side to the second plan is, you officially can not take a DOD job while your on terminal leave and many other power employees may not hire you either as the Army "could" call you back in those 30 days. I have heard from many of my peers and seniors who walked on DOD or Fed or State jobs, ect that the headhunter was understanding and Held the job for them until they could officially l be put on the payroll.
Sir that above is where i get my position you "loose pay" by selling leave at a reduced rate.
Please review and poke holes in it... I don't want to be giving out flawed advice.
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LTC Kevin B.
SGM Erik Marquez - Your discussion is correct. It's just prefaced by what comes next after the military career (the "it depends" part of the discussion). If upon retirement you're just planning to sit at home and drink beer forevermore, then serving out the final month presents a different financial scenario than if you have a job lined up. The details of the job may complicate the decision and change the overall cash flows. Also, in your scenarios, there are other options. One could stay with the Dec 2016 retirement date, but go on terminal leave in Nov 2016. Alternatively, one could pick the Jan 2017 retirement date, serve up until that point, and still sell the accrued leave.
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1SG Bill Farmerie
SGM Erik Marquez - Yes, you can take a federal job, but MUST be on terminal leave. I know this for a fact as I now work in HR field for DA civilians
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SGM Erik Marquez
1SG Bill Farmerie - thanks for the clarification not what I remembered from my tap class
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I didn't sell any back. With house hunting/job hunting PTAD and my acquired leave, i had 120 days off at the end. I didnt notice if i lost money or not, i was focused on relaxing and finding a job. It is a hell of a lot of work retiring. Take the time off. you will not regret it.
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